On August 6, the Faculty of Law of the Ghana Institute of Management and Public Administration (GIMPA) organized an online conference under the theme “the Banking and Financial Sector Crisis in Ghana; Towards Sustainable Reform.” Dr. Ernest Addison, the governor of the Bank of Ghana addressed participants.
He outlined the steps that the Bank of Ghana had, and is still undertaking to secure the financial strength of the banking industry and protect the interest of depositors. Here is a highlight of what BoG intends to do differently to protect depositors and the banking industry.
Strong Institutional Governance
According to Ernest Addison, the central bank would ensure that the Board of Directors of regulated financial institutions have the capabilities to present strong financial judgment and insight to ensure all relevant stakeholders’ interests are protected. Management of Financial institutions is also expected to have the requisite knowledge and skills to effectively and efficiently manage their respective financial institutions.
To protect depositors and banking industry, he mentioned the introduction of “A ‘Fit & Proper Person’ Directive to help ensure that key shareholders, Board members, and key management personnel of banks possess the requisite knowledge, skill, and character commensurate with what is required for their roles.”
Increased Capacity for Supervisory function
Bank of Ghana has also increased and enhanced its human and capital resources that regulate and supervise the financial sector by:
- redesigning training programs for supervisory staff to enhance the quality of policy development, examinations, and reporting on regulated institutions. According to, Dr. Ernest Addison, Bank of Ghana (BoG), is providing this critical training “to retool its supervisory staff to promote higher standards of professionalism and ethical behavior to ensure supervision teams are better equipped to identify early warning signs, enforce regulatory requirements, and ensure prompt corrective actions to moderate the risk of failure in the financial sector.”
- revamping its structures and procedures for licensing with more thorough due diligence and capital verification processes
- Ensuring adequate transparency in the policy development process
- Instituting enhanced processes for an on-site and off-site examination of regulated institutions
Enhanced Analytical Advisory role
Furthermore, the Bank of Ghana has secured a new electronic surveillance software that will boost its analytical advisory role in the banking and financial sector. The new state of the art surveillance will among other things, obtain data from regulated financial institutions more accurately and prevent the high records of wrongful reporting witnessed with the failed institutions such as the Royal Bank Limited, Beige Bank Limited, and Aki Microfinance Company Limited recorded in 2019.
According to Addison, “the software will enhance the analytical capacity of the supervision teams and help with more effective reporting of supervisory concerns for appropriate and timely interventions.”
All these measures according to the Governor of Bank of Ghana, were to address the causes of the systemic failures of the banking and financial sector. To protect depositors and the banking industry as a whole.